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MILAN, June 21 (Reuters) - Italian tax police seized documents from the offices of five lenders on Wednesday in an investigation over alleged fraud in relation to the distribution of diamonds to bank customers, three sources with knowledge of the case said.
The police took documents and computer files from Intesa Sanpaolo, UniCredit, Monte dei Paschi di Siena, Banco BPM and Popolare di Bari, said the sources, who asked not to be identified.
All five banks declined to comment.
Three sources listed all five banks, while several other sources said documents had been seized from lenders but did not list the names of all five institutions.
Diamond brokers have been using Italian banks to sell high-quality investment diamonds in a business that totalled at least 300 million euros ($334 million) in sales in 2015, according to broker data.
Diamond sales have taken off as negative interest rates have curtailed bank revenues and rendered many other investments unattractive for clients.
Banks make a one-off commission of at least 10 percent on diamond sales, in return for putting the diamond brokers in touch with their clients, between whom the contract is signed.
The business usually accounts for no more than 2 percent of a lender's total fees.
Italian market regulator Consob opened an investigation last year into the sale of diamonds through bank branches after a TV report alleged the stones were missold to the public. Consumer associations have also said they received complaints.
In several cases, people have told Reuters that diamonds they had bought as an investment were valued at a much lower price than they paid for them.
Selling diamonds with the promise of a financial return is banned in Italy unless regulated in the same way as other financial products, such as mutual funds. Banks and brokers say they do not promise a financial return when selling the stones.
($1 = 0.8971 euros) (Additional reporting by Maria Pia Quaglia, Emilio Parodi and Andrea Mandala; Editing by Mark Bendeich and Edmund Blair)